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Business News of Friday, 17 November 2023


'Petrol to sell for N1,000/Litre' - Marketers raise concern over NNPC’s monopoly as FX scarcity bites

Mele Kyari Mele Kyari

Oil marketers have said that the Nigerian National Petroleum Company (NNPC) Limited's dominance in petrol importation violates the Petroleum Industry Act.

They made this known at the post-conference press briefing of the 2023 Expo of the Oil Trading Logistics Africa Downstream Energy Week recently held in Lagos.

Monopoly promotes unhealthy competition

Tunji Oyebanji, Chairman of Oil Trading Logistics and CEO of 11 Plc, said the monopoly of the NNPC as the supplier in the downstream sector promotes unhealthy competition.

As contained in a Punch report, he said independent marketers have been unable to import petrol due to the inability to access forex exchange at a competitive rate like the NNPC.

According to him, the NNPC is supposed to play by the same rules as other downstream companies.

He said: So, you see a situation where NNPCL still dictates the market share others have, because if I, for instance, ask for 100 trucks of petrol, and I get 5, then, my market share has been automatically determined by the NNPC. And this is not competition and is unhealthy for the industry.

Dr Emeka Akabogu, the Executive Vice Chairman of OTL, also said that all stakeholders' collaboration would help improve the downstream sector.

He noted that the deregulation of the downstream sector and removal of fuel subsidy, as advocated by the PIA, was wrongly timed.

Even though it took Nigeria almost 20 years to achieve passage of the PIA, he said that the industry is still not in the right place.

Akabogu posited that removing the subsidy on May 29 was wrong. He noted that crude prices at the international market were high, adding that the Federal Government floated the naira at the time.

He said: Before May 29, the exchange rate was around 400-500/$1. However, after subsidies were removed, if we decide to implement the PIA, petrol should be selling for N1,000 per litre.

Meanwhile, the NNPC earlier announced that it had successfully secured $3 billion in crude-for-cash funding from the African Export-Import Bank (Afreximbank).